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DUSTIN LONGPRE
Buzzer
reply 31 vote 3
 

Agent Bonuses

Whats your thoughts on giving an agent a bonus for selling your house? Cliff Stevenson thinks its a bad idea. Have a look at his video blog: http://www.cliffstevenson.com/Blog.php/don-t-worry-about-agent-bonuses
10
Canada / General Chit-Chat
 
 
 
MOO STASH
BabbleBee
reply 277 vote 10
 
 
A bonus?!?! Are you kidding me?? Don't they make enough off the sale of the home?? If they sell the house for more than asking, then they get a higher dollar amount in commission, which is enough of a bonus!
 
 
ROY BHANDARI
BabbleBee
reply 467 vote 21
 
 
^ I think you misunderstood the question. This is when the sellers offer the buyers agent a "BONUS" for selling it. The idea here is that the buyer agent is getting paid more and would be more inclined to push their listing over others.
Disclose Disclose Disclose. If your client finds out later that you pushed them on a certain property for your bonus - it's your ass.
 
 
MOO STASH
BabbleBee
reply 277 vote 10
 
 
^^ Is that legal?!?!
 
 
ROY BHANDARI
BabbleBee
reply 467 vote 21
 
 
Well...you can offer the buyer agent anything you want. The standard is 2.5% but there is nothing stopping you from offering 3% or 5% or 10% or whatever. However, it's important to disclose stuff like this. Similar to if I, as an agent am referring business to a mortgage broker or lawyer and I'm getting a kickback - I have to disclose this to the client (it's written in the Buyer Representation Form that I have to disclose).
 
 
DUSTIN LONGPRE
Buzzer
reply 31 vote 3
 
 
As Cliff pointed out and Roy is restating, disclosure is key. As a buyer I'd for sure want to know if my agent is going to get an extra big kick back if I buy one house over another. What is my agents reasoning for showing the house? Is his judgment clouded by the $$$? Will he mention a deficiency if he notices it or gloss over it and make it seem like no big deal to ensure he gets the extra money selling me that house vs another where there is no bonus attached? As a buyer you hope your agent is honest and working for you... but in a world where money drives everything we do, its tough to even trust your own relatives or friends not to make a buck even if it's going to cost you something in the end.
As a buyer I think the practice is wrong. Keep the playing field even and keep the buyer agents cut a standard % with no room for a "bonus".
 
 
CLIFF STEVENSON
NewBee
reply 2
 
 
What I was trying to say in this video was that the sellers should be focusing on incentives for the buyers....not the Realtors. Give the bonus to my clients. I'm already being compensated, but i know my clients are looking for the lowest price and best deal, so give it to them. While i don't know if I would call Realtor bonuses wrong (as the seller is offering the bonus and obviously trying to get creative with their sale), i don't ever want to have a client second guess anything in the buying process when I disclose I am being paid a bonus. That would really really bother me.
Roy hit the nail on the head when he said "The idea here is that the buyer agent is getting paid more and would be more inclined to push their listing over others." Although I'm aware of the reality and it's existence, I just don't like this "idea".
Good comments.
 
 
ROY BHANDARI
BabbleBee
reply 467 vote 21
 
 
Buyers who are looking at this thinking "I can't trust my buyer agent" - I'd like to make it clear that this kind of "bonus" is pretty rare in major markets like (most of) the GTA. I've seen these kinds of bonuses offered but only a handful of times...most of them were when we had a bit of a soft market in early 2008 and sellers were getting antsy. In a thriving market we don't see many of these bonuses.
 
 
CLIFF STEVENSON
NewBee
reply 2
 
 
These bonuses are fairly common (tough to define common here....maybe 1 out of every 25 listings?) for us here in Calgary, but much more common in a down market as Roy has referred to. The amounts here are usually not as much as the example I used in my video, but an extra $500 or $1000 is normal for these incentives. We're fairly busy in our market right now, and I've probably shown 3 or 4 listings in the last week with a bonus.
But referring to Roy's earlier point, these have to be disclosed to the buyer.
 
 
EUGENE MEZINI
Buzzer
reply 156 vote 6
 
 
Think of it from a sellers perspective though. If you know that agents will be more inclined to push your property, wouldn't you want to offer a small incentive? Same question applies to anyone listing a home with less then the standard comission. Why would you give agents incentive not to show your house? I personally hate telling my clients that on top of this price, you will also have to cover my comission.

I show my clients the full broker report so they know exactly how much is being offered to me & that way i have disclosed the details since they have seen it with their own eyes.

And if I were selling my own home, I would definity offer an incentive to agents. May not be good for the buyers but it definitly is for the sellers. As long as the client knows its all good in my opinion
 
 
CARY CHAPNICK
Buzzer
reply 116 vote 12
 
 
The new OREA confirmation of co-operation and representation clearly states the buyer agent commission....this is a nice change as clients always asked me my share ( i am primarily a buyer agent).
Ive been given bonuses for selling houses as a listing agent over the asking price.....also i have twice been given gift cards of substantial value for saving buyers thousands on houses with some of the skills i learned from Paul Slavens who was my mentor and a 35 year veteran of the business.....lots of great ways a buyer agent can add value to negotiations and using these skills CAN and will save buyers $$....so i am a firm believer than a joe public calling a listing agent will always pay more for a house than had he found his own skilled negotiator
 
 
 
 
 

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